Admin expansion Germany's Retail HQ Boom

After giving their stores a makeover, German retail groups including Aldi Nord, Lidl and Zalando are showing off their success by investing heavily in swanky new headquarters.
Inside Aldi Nord's planned new headquarters, one of several German retail groups investing in new offices.

The video begins with a black-and-white image of John F. Kennedy. The former U.S. president is standing in front of the town hall in the West Berlin district of Schöneberg giving a speech that will go down in history: "I take pride in the words: Ich bin ein Berliner!"

But in the video President Kennedy's message sounds a little different: "Zalando is ein Berliner!" The statement is followed by high-speed footage of a trip past the city’s Victory Column and Potsdamer Platz, and across the Oberbaum Bridge into the offices of the online fashion retailer, with its spectacular view of the iconic Television Tower.

Zalando produced the video specifically to introduce its latest major architectural project. The company is building the new Zalando Campus in the city's Friedrichshain neighborhood, where new office space will be provided for about 5,000 employees. The centerpiece is a futuristic building with a curved façade, scheduled for completion in 2018 and intended to solve a serious problem for the online fashion retailer: space.

Zalando has grown rapidly since it was founded in 2008 in a Berlin apartment. But the firm is not the only company paying architectural tribute to the successes of recent years. A number of other retailers are also in the midst of major development projects.

It already seems clear that not everyone will be enthusiastic about the mix of tightly furnished, open-plan offices and spacious lobbies, especially given the pressures the moves will place on employees.

Discounters Aldi Nord and Lidl, organic-foods retailer Alnatura, drugstore chain DM and department store operator Galeria Kaufhof are all building new administration buildings and headquarters. And the structures are about as visually reminiscent of the companies' former 1980s headquarters buildings as supermarkets are of corner stores.

There are concrete reasons behind the building boom. The retail giants have expanded considerably in recent years, moving into new countries, adding thousands of new employees and, in some cases, dramatically increasing sales. Now they need to expand their infrastructure to accommodate the next growth spurts, and in doing so are emphasizing large expanses of glass and parklike surroundings.

The offshoots of the boom in the German retail sector can even be felt in the quiet Neckar River valley in western Germany. A handful of cafés, tourist shops and smaller business line the historic downtown section of Bad Wimpfen. The spa town on the river, near Heilbronn, is about to become the capital of the German discount retail industry, with the opening of Lidl’s new domestic headquarters.

By no later than early 2020, 1,300 employees will move into a terrace-shaped group of buildings, built with an estimated nine-figure construction budget. The Lidl complex will cover an area of more than four hectares (9.9 acres), and it will include underground boulevards and a fitness trail connecting the individual building units.

This is the first time in the company's history that "we are spending so much money on an administration building," said Klaus Gehrig, head of the Schwarz Group, which owns both Lidl and the Kaufland retail chain. A simulation shows how the buildings, with their flat, green roofs, will fit almost seamlessly into the surrounding landscape.

Lidl's arch rivals are pursuing similarly spectacular plans. Aldi Nord is currently building a new corporate headquarters at its head office in Essen. The Aldi Nord logo, a curved, blue letter A, adorns the façade of models of the building. The roofs are also "green" and the individual building segments are arranged in terraced form.

According to a report by the Westdeutsche Allgemeine Zeitung newspaper, Aldi Nord plans to commemorate company founder Theo Albrecht, who died in 2010, in the bright lobby of the complex. His office, preserved in its original form, will be displayed there as a museum-like exhibit. The simulation also shows an Aldi store in the interior of the headquarters complex. The design even includes sculpture gardens, jogging paths and playing fields.

Beginning in late 2020, the new headquarters will provide space for about 800 employees. However, the site, where the current headquarters building also stands, offers enough room for expansion to accommodate more than 2,000 employees. Construction is set to begin in early 2018.

A bird's-eye view onto Aldi Nord's planned new headquarters in Essen.

By then, organic food chain Alnatura will likely have completed its move from Bickenbach to the central city of Darmstadt, where it is currently building a new headquarters for about 500 employees on the site of a former military barracks.

The ideas of Rudolf Steiner, the founder of anthroposophy, are upheld at Alnatura. Mr. Steiner believed that man should enter into a "symbiotic relationship with nature," an idea that will also be reflected in the architecture of the new office building, company officials said at the groundbreaking ceremony in September.

The structure will be Europe's largest office building made of clay. It will have no mechanical air-conditioning system, but instead will be supplied with fresh air from a nearby forest through an underground canal. The campus will also include a kindergarten for about 80 children, along with educational and adventure gardens open to the public, and an organic, vegetarian restaurant. It will be ready for occupancy in early 2018.

The DM headquarters in Karlsruhe has also become outdated. Since company founder Götz Werner opened his first drugstore in the southwestern German city in 1973, the company has seen phenomenal growth rates and has become one of the major players in Europe. The chain approached €10 billion ($10.5 billion) in sales in the last fiscal year.

In describing the founder's philosophy, Handelsblatt once wrote that Mr. Werner had "turned his storess into personal experience sites, where employees are to reflect the spirit of the company between the shampoo shelf, the scented candle display and the cash register."

The company also emphasizes open space for employees in its architectural approach. All DM employees, previously distributed among seven locations throughout Karlsruhe, will be working under one roof again at the new headquarters. Solar panels will provide a sustainable and efficient energy supply. The new building is scheduled for completion by the spring of 2019, at a total construction cost of €120 million.

It remains to be seen whether the new administration buildings of DM, Alnatura, Aldi, Lidl and Zalando will be as exciting in real life as they look in an animation. In some cases, the architectural plans are little more than bold sketches.

But it already seems clear that not everyone will be enthusiastic about the mix of tightly furnished, open-plan offices and spacious lobbies, especially given the pressures the moves will place on employees. But the companies have no other choice, with current office buildings bursting at the seams. To continue growth, they need to create the necessary space.


This article originally appeared on the website of the business magazine WirtschaftsWoche. To contact the author:

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